Staying in control in a digital and agile world

Data-driven auditing is giving rise to new dynamics and working methods within audit and risk departments. However, the large auditing firms in the Netherlands will feel the effects of these changes as well. This is what led PA and Nyenrode Business University to enter into a partnership.

Both parties see a striking paradox: cuts are being made in the business workforce, but staff numbers in internal audit and risk departments keep growing. Ruud Brink, Digital Data Expert at PA Consulting, thinks this can partly be explained by the fact that these departments cannot keep up with the pace of new digital and agile working methods in business. This completely changing world requires a modern and data-driven approach to auditing and risk management. But many of these departments are not yet fully equipped for the task, so they hire more people who continue to take a conventional approach to their work. That will lead to problems in the long run.”

PA and Nyenrode developed a two-day training program in which they show that big data and data quality are the keys to a successful transformation. For (internal) monitoring, it is becoming increasingly important to work with and understand data-driven decision support systems. This need was also expressed during interviews with CFOs and risk managers, Brink says.

Data changes audits

Remmelt Vetkamp, financial director at Nyenrode, highlights the added value of the partnership: 'Data changes the way in which audits are carried out. This results in all sorts of technical diemmas. How do you deal with the accuracy of a model, model validation and data quality issues? And how does this affect people’s roles and responsibilities? These and other questions are addressed in the Data-Driven Audit masterclass. Additional topics covered include the pitfalls of collecting data and derivative data for data sets'

Impact on auditing firms

Brink anticipates that data-driven internal monitoring and risk management will also have a considerable impact on accounting firms. 'A development is currently taking place in which the large auditing practices are hiring an increasing number of data analysts. It’s a positive development, as firms are also expecting auditors to become proficient in digital techniques. Such skills are necessary to remain relevant in this sector, which will shrink in the years ahead as a result of digitization.'